Europe faces deepest recession since World War II as economies shrink

The COVID-19 pandemic has brought major economies in Europe to a grinding halt. /John Macdougall/AFP

European countries are heading into their deepest recessions since 1945 because of COVID-19, a slew of official figures suggest.

Eurostat, the statistical office of the European Union, said the eurozone's economy shrank by 3.8 percent in the first three months of 2020 – the sharpest quarterly decline since the body started flash estimates in 1995.

The report added that the wider EU economy had also contracted, by 3.3 percent.

Among the major economies, France posted its sharpest downturn since World War II as the country's gross domestic product (GDP) plummeted 5.8 percent from the previous three months.

Spain 's GDP contracted by 5.2 percent over the same period due to tough lockdown measures – the country's steepest drop since records began in 1970.

Germany 's seasonally adjusted jobless rate spiked to 5.8 percent after the government slashed its GDP growth estimate in 2020 to -6.3 percent from the +1.1 percent predicted in January

The European powerhouse warned that COVID-19 would plunge the economy into the deepest recession in its post-World War II history.

The UK 's statistics office reported that two-thirds of companies in Britain have applied for the government's emergency scheme to pay workers who are laid off temporarily during the coronavirus crisis.

Retail sales in Ireland fell 12.7 percent month-on-month in March. The country's Central Statistics Office reported that vehicle sales dropped 30.7 percent month-on-month, bar sales fell 53.1 percent and clothing, footwear and textiles were 49.2 percent lower – although supermarket sales were 14 percent higher.

The World Bank has predicted that Albania 's economy, hit by an earthquake as well as coronavirus restrictions, could shrink by as much as 5 percent in 2020, even if most economic activities restart in early summer.

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Source(s): Reuters